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rnThe government made the Venture capital industry almost overnight.rnInvestment relief under the Inland Revenue Act in 1990 brought in seven companies who set up venture capital funds.rn
rnldblquote Investors in this Venture Capital fund would get investment relief. That is certain part of their investment is tax deductible.
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rnThe second incentive was that the Venture capital fund set up will enjoy a tax holiday for 10 years. The first was successful and about seven VC funds were set ups and they collectively invested Rs.
1.5 billion at that time, says Nextventures CEO Nissanka Weerasekera.
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rnThis money was enough to sustain the industry for over a decade.rn
rnHowever, very little in terms of new funds came in to the industry during this period. rn
rnThings have now come to a crunch for VC companies. The venture capitalists have very little money left for new investments.
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rnldblquote There is very little money about Rs. 200 mn to Rs. 300 mn. T